Bain Capital agrees to buy business from Olympus Corp; Tension in single-asset deals with externally set valuations

Bain is buying Evident from Olympus Corp.

Morning Hubsters!

How is your week proceeding? What are you getting ready for when the world gets back to business (and school!) next week?

Med devices: Bain Capital agreed to buy Evident Corp, which makes microscopes for life sciences and industrial applications. The company also makes videoscopes for remote visual inspection and non-destructive test equipment. The deal is valued at about $3.1 billion, based on the purchase price of about 427.6 billion yen, according to a filing from the company.

Bain is buying the company from Olympus Corp, where Evident is a subsidiary. The deal is expected to close in the first quarter of 2023. Read more here on PE Hub.

“We have come to the conclusion that for the purposes of enhancing the corporate value of the entire Olympus group and realizing self-sustainable and continuous growth of the Scientific Solutions Business, the best option is to transfer all shares of Evident to Bain Capital based on the corporate strategy,” Olympus said in a statement.

Food: Blue Point Capital acquired Water Lilies Food, which makes and distributes frozen Asian-inspired cuisine for retail private label and food service customers in the US. The PE firm is investing alongside CEO and second generation family member Peter Lee, whose family founded the company in 1995. Read more here on PE Hub.

External: Secondaries buyers are increasingly backing away from single-asset secondary deals that are priced off of a preceding minority stake sale, Lazard found in its recent first-half secondary volume survey.

While buyers may prefer valuations set through auction, GPs who run secondary sales generally like pricing set through earlier financing rounds. This tension is increasingly coming into play in single-asset deals, where several buyers (confirming Lazard’s findings) have said they generally avoid deals with externally set valuations.

The problem is, single-asset deals often involve a GP’s treasured portfolio company – an asset that many investors would like a piece of, to ride future growth as the secondary capital allows investors to continue building the business.

And so at times, secondary buyers have to put aside their concerns and move forward, even if the pricing on the deal has nothing to do with their own price discovery work. Single-asset deals continue to be one of the most popular forms of liquidity options in the market today. That momentum is not likely to go away any time soon as GPs and LPs both seek liquidity in an environment where exit activity, and distributions, are slowing.

Read more here on Buyouts.

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